How Much Data Is Too Much Data?

“Without big data, you are blind and deaf and in the middle of a freeway.”

– Geoffrey Moore, author and strategy consultant

While there is truth to Moore’s bold assertion about the modern risk of doing business without the benefit of big data, it is equally true that the data itself will not save you from traffic while standing in oncoming traffic. It doesn’t, by virtue of its existence, offer sight and hearing. Gary King, Harvard’s Director of the Institute for Quantitative Social Science notes that “big data is ‘a massively important development’ but… the data itself isn’t what’s most important. It’s the algorithm” (Harvard Gazette). At the simplest level, King’s assertion lends itself to the adage: It is what you do with it (the data) that matters.

Never before have so many not known what to do with the excess of information. Rarely does a topic elicit so many catastrophic metaphors: blizzards and avalanches of data, the data lake (a term for a large repository of information with the ability to handle infinite tasks simultaneously) has become the data flood. The data burms have collapsed, threatening to wash away those who don’t have a hold on it—or so it seems sometimes.

It is time to shift the conversation. Big data is just big data. It doesn’t signify anything nor predict calamity. What big data does represent is an opportunity: an opportunity for actionable insight, an opportunity to create value, an opportunity to effect relevant and profitable organizational change. The opportunity lies in which information is integrated, how it is visualized, and where actionable insight is extracted.

In travel circles, the big data conversation often involves demographics, behavioral information, and social or psychographic data—and the new aim of big data is in the personalization of the travel experience, from marketing to booking to the stay. Perhaps surprisingly, the same holds true for travel management companies. Leveraging big data to personalize service for your clients adds value, and in doing so, allows you to not only influence your clients’ bottom lines but also your own as you differentiate from your competition.

As EyeforTravel notes in a 2015 data recap, “Increasingly companies are recognizing [sic] that it’s not necessarily about ‘big’ data, but instead using all the ‘right’ available data streams to produce results in good time.” Where travel management companies must begin in the murky waters of big data is to isolate useful information. When reviewing annual travel spend, for instance, what matters are the areas of spend that are substantial, those that affect your client’s P&L at the end of the day. An individual room night does not matter unless you know that executives will be booking suites in New York on a recurring basis this fall. What matters more than the average of all first class and economy flights is the ability to look at flight class against organizational hierarchy alongside booking patterns (last-minute or advanced) across airlines and destinations. There are two levels of value: one is in the ability to correlate different data sets as in the aforementioned example; the other is in understanding trends, averages, and the top 10 and bottom 10 of any major category of travel (flights, hotels, ground transportation, business, leisure, and so forth).

However, this only truly matters if the information is then used to guide the corporate travel compliance standards, ideally creating substantial savings. For travel management companies, providing this level of actionable business intelligence takes your role as a third-party from useful to indispensable.

In 2014, Starwood began optimizing revenue based on big data by reviewing guest preferences, inventory, and property location (i.e., particular data streams) followed by creating highly tailored incentives (i.e. action). They reported to the Wall Street Journal a hefty increase in revenue between Q4 2013 and Q4 2014—from $128 million to $238 million and an increase of 4.4% in revenue per available room. This example is relevant for two reasons. First, it highlights the relatively recent adoption of actionable big data initiatives by some of the world’s most influential travel brands. Second, it demonstrates that the process of identifying critical data then leveraging it to achieve a specific goal can be extraordinarily effective not only by creating immediate revenue increases but also by generating long-term revenue through loyalty. While travel management companies are just beginning to harness the power of big data, it is clear that when managed well, the potential is vast.

So, to the question “How much data is too much data?” we reply “data is not about quantity but about the quality of the data streams toward a relevant and actionable goal.”